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New Zealand Tax Exemption

Discussion in 'Education, Research and Inside Reports' started by Anon453453, Mar 19, 2008.

  1. Anon453453 Member

    New Zealand Tax Exemption

    CoS has tax exempt status in New Zealand, but some documents are suggesting that shenanigans may be involved.

    Let's see what we can do about it Anonymous.
  2. AnonKiwi Member

    Re: New Zealand Tax Exemption

    Good idea on starting this.

    On IRC there were links to the charity rules from the IRD website, but none of us were tax-lawyer geek enough to be able to work out the nuances and how the COS might have got in under them.

    There are some longer term research projects individuals are working on, so we may see something on this in the longer term, but nothing immediate. It might take detailed examination of publicly available financial records to get anywhere. And those have to be got and put into the hands of experts.
  3. mary.overit Member

    New law/Commission may alter tax exemption status

    I've been doing some homework on the tax exemption status of scientology in NZ.

    Here is a link to a letter from NZ Inland Revenue (IRD) to the lawyer that assisted scientology.

    http://www.cesnur.org/2003/scient_jan.htm

    The paragraph about the indebtness of NZ church to mother church is interesting. On the last filed annual return to the incorporated societies (balance sheet for year 2005) the NZ church owed "affiliated organisations" over $1,000,000! Holy crap! That's quite a bit of dosh to owe the American boys! Wonder if IRD would be happy about that. Me thinks it kind of violates the terms of agreement that IRD initially indicated. (www.companies.govt.nz)

    "Outstanding debt to Mother Church
    "As discussed, I have concerns and reservations about the amount of indebtness on the books at the time the proposed Rules are adopted. Repayment of this debt may well mean the New Zealand Church is applying funds to non charitable purposes."


    You may also notice a reluctance by the IRD writer, almost a "we've been pushed into granting this tax exemption by the cleverness of Molloy" feeling.

    The good news is something important happened in NZ which may revoke the tax exemption for scientology.

    Previously any charitable body wishing to have tax exemptions had to apply to the IRD and IRD would approve (or not) tax exemptions. Scientology was granted this in late 2002. The lawyer they used was Anthony Molloy. Molloy even mentions his handy work on his profile page.

    http://www.shortlandchambers.co.nz/barristers/anthonymolloyqc/

    In 2005 a new law was passed called the Charities Act. This law allowed for a Charities Commission to be established. ALL groups wishing to conduct charitable activities have to register with the Charities Commission. The Commission thoroughly looks into the group to verify if it is indeed a charitable activity.

    The problem for scientology is this. If a group currently has tax exemption status from IRD this will become void if that group fails to or is declined charitable status from this newly formed Charitable Commission. In essence the Charities Commission is going to be the legal body that determines if a group is undertaking charitable activities. They are working with a new legal definition of what is and isn't a charitable group. IRD will just follow their lead to issue tax exemptions. Nice & simple.

    All charities have to be registered with the Charities Commission by 01 July 2008. After that cut off point IRD will revoke tax exemption status for any groups not registered with the Commission. The clock is ticking. It is mentioned on the Charities web site that groups should not wait until the last minute to register due to a "first in first served" system they will process applications. There is a long queue to be processed and they make it quite plain that there will be no pushing or shoving one's way to the head of the queue to get applications processed. So no fancy lawyers will help if scientology misses the 01 July cut-off date.

    http://www.charities.govt.nz/

    The Charities Commission maintains an online database of all registered groups. Scientology, CCHR, etc are NOT currently registered.

    There's quite a bit more to all this but some salient points are:

    - to maintain tax exemption status all groups performing "charitable" acts MUST be registered by the Charities Commission. Scientology & CCHR are NOT on the new register.
    - there will be issues surrounding the amount of monies owed to overseas "mother church" when scientology applies for registration with new commission. An educated guess on my part.
    - CCHR is going to struggle to get registered (will need some very fancy language). CCHR has tax exemption status from NZ IRD. What charitable work does CCHR do in the strict legal sense?
    - the new Charities Commission has strict rules about filing annual reports, annually. If you look at currently filed annual reports for scientology it is 2 years behind (2005 being the latest filed). Oh deary me!
    - there are offences and penalties in the Charities Act 2005 for breaching what is deemed a charitable activity. Time for some serious homework on these.

    This is going to be interesting to see if scientology and it's word-smith lawyers can get NZ scientology registered with Charities Commission and hence retain tax exemption status.

    Thought you might like a tiny bit of good news.
    Have yourselves a great day/night!
  4. AnonKiwi Member

    Re: New Zealand Tax Exemption

    ^ Holy crap - you're an absolute star!

    Do you know if the Ngati Arohanui Trust is registered, or Narconon Aotearoa?

    Also, the time might be ripe to start a bit of lobbying or a petition? I think gathering signatures at the next three protests might be extremely useful to the lobbying effort.
  5. AnonKiwi Member

  6. CVAnonymous Member

    Re: New Zealand Tax Exemption

    Wow, lots of great info! I'm also wondering about our making a submission to the Charities Commission. Has anyone contacted them yet in order to ask about this and to verify that neither CO$ nor their front groups are on the list?

    If not, I will be more than happy to contact them. I don't think we should have several people emailing them; that'll just tick them off.
  7. Anon453453 Member

    Re: New Zealand Tax Exemption

    Didn't you know? The CCHR is a friendly organisation that campaigns tirelessly for human rights taken away by evil psychiatrists.
  8. AnonKiwi Member

  9. mary.overit Member

    Re: New Zealand Tax Exemption

    I am still doing homework. I like this Charities Commission! The more I read, the more I agree with it’s purpose. The basic purpose of the Commission is to build up a transparency around charitable groups (I LIKE that!) & therefore promote public confidence in charities because they are being monitored and made accountable. Things like annual reports must be filed and these will be available to the public - online. If you don’t file one you can be deregistered (probably after a few “warnings”).

    Another nice touch is what must be contained in the annual report. It is not just financial info they need but info like how many voluntary staff are working for your charity and how much are they paid! I LOVE that! Also info like how much a membership costs, how many members, etc.

    This info is required so that a statistical picture can be built about the charity sector in NZ. Scientology will not like having to report their statistics to the government which the public can actually SEE. When I read the press release for the 2002 tax exemption “wow aren’t we great” thing, Mr Mike Ferriss said that NZ had 8,000 members. NOT TRUE!!!!!!!!!!!!!!!!!! I nearly swallowed the whole apple I was eating when I read that. 8,000 members! I think not!

    Okay back to the homework project…

    I have checked the Companies Office database for all and every scientology related groups that is registered as either an incorporated society or a trust.

    1. The Church of Scientology NZ Inc.
    2. Criminon Aotearoa Trust (established April 2001). Nil annual reports filed.
    3. Narconon Inc – not active. Registered 1976. Nothing ever filed.
    4. Narconon Aotearoa Trust. Registered 1998. Not active – nothing ever filed.
    5. Youth for Human Rights (NZ) Inc. Registered Feb 2006. Active. Annual report filed for 2007.
    6. Applied Scholastics NZ Trust. Registered Jan. 2006. Nothing filed since.
    7. Citizens Commission on Human Rights Inc. Active. 2007 annual report filed.

    That Trust you asked about – Ngati Arohanui Trust (Hopetoun St, Ponsonby) was registered 1992. Last activity on file is 2006. I don’t think this is connected to scientology. There may have been some former association but not sure on this. If you know otherwise let us know.

    There are some other scientology connected groups that have been struck off the register. Best guess on reason why – people left & there was no one to file anything to companies office. Simple. No one sticks around when they are being treated badly.

    I then ran a full search through the Charities Commission database. None of the above societies or trusts are on their database nor any other variants I played around with. The Commission’s database is a key part of their duties and there would be no reason to doubt that if a group is registered with them it would not be on their database. All in the name of transparency.

    I’m working on heaps of background info here. Weighing up the possibilities contained in the Charities Act 2005. Meanwhile everything else that is happening is great.

    I’ll keep at the homework.

    Wishing you all a great weekend.

    p.s. if anyone is short of exciting things to do tonight, it's the annual L Ron Hubbard birthday celebrations gig tonight - being held at the newly purchased-for-ten-million-dollars building in Grafton (old White Chapel Art School).
  10. Anon453453 Member

    Re: New Zealand Tax Exemption

    The Ngati Arohanui trust is a drug rehab org that uses LRH Tech, the Narconon approach.

    It was headed by Betty Wark, until her death in 2001, and to some extent by her son Gary Wark, both scientologists.

    My opinion, based on empirical evidence, is that anything involving scientologists cannot be secular. It is also my opinion that these organisations exist PRIMARILY to lure people into scientology rather than their stated purpose.
  11. AnonKiwi Member

    Re: New Zealand Tax Exemption

    Mary, awesome work. Click through the link in my sig for "Scientology in NZ" research done to date.

    Is applied scholastics WISE? Nope, it's ABLE, right? Where's WISE.. we know it's active..
  12. anonyrat Member

    Church of Scientology NZ Financial Analysis

    Church of Scientology NZ Financial Analysis!

    From Anonymous (my bolding):

    -------

    NZ Scientology is NOT popular nor financially healthy!!

    The accounts on the companies office web site make for a fascinating spread sheet exercise.

    After bashing around the figures, some real conclusions can be made: (please feel free to double check these figures)

    Figures are done between years ending Dec 1996 & Dec 2005 (being the only one’s available).


    First fact

    Scientology declared a total income for spiritual counseling and training of $1,772,829 for the period Dec 1996 to Dec 2005. This is monies paid by members for services.

    However there is another figure under liabilities called “Members contributions paid in advance”. This is a monetary amount for services paid for but NOT delivered. This figure is: $970,198 for year ending Dec 2005. Note that this figure fluctuates year to year but using this 2006 figures gives us a picture.

    $1,772,829 paid for services total
    Minus
    $970,198 liability of services not delivered =
    $802,631.

    What does this tell us?

    That less than ½ the money paid into the church is being delivered to its members. This is a serious thing. If say you were selling cars. People paid your company $1,000,000 to buy your cars. Over the years you only delivered about ½ of those cars ($500,000) – what would happen in the real world? Your company would fall over due to a total lack of public confidence in your business. Someone would sue you, etc. But here we have under the cloak of charitable status and “church” very real financial madness.


    We can conclude several things from this:

    Scientology is very good at extracting money from its members.
    Scientology does not deliver the services that its members pay for.
    That its members don’t have faith in its services.
    That its members don’t have any recourse in this due to the nature of internal justice that scientology operates.
    That there is a real possibility that the services they do deliver are damaging people & this intangible (or otherwise) factor its keeping members away, keeping them quiet.



    Second fact:

    Over the ten year period a figure for income from “affiliated groups” is given. Total of these: $1,869,449. We can assume this is from international scientology sources.

    Under liabilities there is a total for “affiliated groups” – meaning scientology NZ owes these affiliated groups this money. It fluctuates as obviously some money is paid back to overseas scientology each year but is around $1million for each year.

    But notice this: the total amount of money paid in by members in NZ is $1,772,829 which is LOWER than the total money paid by “affiliated groups”
    Paid for services total $1,772,829
    Paid by affiliated groups total $1,869,449
    Difference = $96,620.

    Kind of a vote of bad confidence in those figures. Perhaps scientology overseas is propping up scientology in NZ. Looks that way. Also it would seem that scientology from a financial perspective is more supported by overseas affiliated groups that a popular membership in NZ. Interesting.


    Third fact:

    Scientology NZ declares in its annual reports for the ten year period a total of $51,619 for legal and professional services. This is just under 3% of the income paid in by its members being paid for legal/professional services. Or 5% of the money they DO deliver to it’s members. That’s high for a “church”. Why does a church need to spend so much on legal/professional advise?


    Fourth fact:

    There’s a fair amount of money coming into NZ scientology from these “affiliated groups”. In 1996 it was over $1 million ($1,310,712). If you bash the figures around, some of this money is being paid back to the overseas affiliated groups each year. How does this affect the legal status IRD granted NZ scientology for tax exemption?


    Fifth fact:

    Other than the above sources of income there are also two other amounts.
    Donations total: $333,808
    Extraordinary income (whatever that is): $777, 808.
    What are these amounts being extracted for (new building donations?) and used for?


    Sixth fact:

    The total of liabilities for each year is always around $1,000,000. A church has liabilities of $1 million but does not OWN any property (no mortgages during this period). The liabilities are to it’s own members and to its overseas “affiliated groups”. What the?

    The whole thing is miserable for scientology. It is NOT in a healthy financial position. It’s a MYTH that it has a thriving member base. Just look at the picture, step back and look at it. They’re being propped up by overseas money, can’t or don’t deliver their services to those NZ’ers that do “donate”, and have large liabilities.

    There are so many questions that need answering here. It is time for a forensic audit of the finances of NZ scientology organization.

    In the middle of all of this they buy a $10,000,000 building - 2007. Again, what the? They do NOT have the assets to support a loan of millions so we can safely assume the money has come from an overseas “affiliated group”. From this we know that scientology NZ is not the slightest bit independent of overseas scientology which is NOT acceptable for groups with NZ tax exemption status. It makes a joke of the purpose of charitable tax exemptions that NZ IRD grant for the “betterment” of the NZ community. Tax exemption is a privilege, granted for the citizens of NZ, etc. It is not some clever game to be played to avoid paying taxes & look like an authentic church so you can financially succumb to & support your dictatorial overseas mother church.

    It is time for a big floodlight to be turned on here. There are some serious questions that need asking here by the appropriate authorities. Bring on the forensic auditors IRD!!!!

    --------

    This is fascinating stuff! Exactly the sort of thing we need to get this tax exemption re-examined. We've got an anon talking to the IRD, right?

    The companies office database is here if anyone wants to check the figures for themselves.
  13. anonyrat Member

    Dear Helen Clark and IRD - From Anonymous vid

    AnonymousSup has taken the information from the fantastic Church of Scientology NZ Financial Analysis posted upthread and turned it into a video!

    YouTube - Dear Helen Clark and IRD - From Anonymous

    Go watch; they've done an excellent job at cutting down the info into bite-sized pieces and picking out the most important bits.

    Kiwi ex-pat lawyer Graham Berry, he of the pwning CoS together with Sean Carasov in LA fame, says "I did enjoy the NZ Anon Scientology tax-exemption fraud video addressed to the Prime Minister." :D

    I'd love to see another vid targeted at Anonymous and our NZ supporters with information on what WE can do about it, mentioning the petition we wrote last night asking the Charities Commission to critically examine the CoS's application, and those of its front groups, before deciding to grant them charitable status. It's now up on Enturbulation here http://forums.whyweprotest.net/discussion/general-discussion/global-petition-against-cos-starts-april-12-a-7698/ . We'll be collecting signatures on April 12th and then presenting the petition to the Charities Commission before July 1st.

    If you want, AnonymousSup, I can help you write a script for that vid and scout out relevant images, and I'm sure there are other NZ anons who will be willing to lend their leet skillz as well.

    Congrats to our anonymous financial whizz and AnonymousSup for getting some real solid evidence on CoS's dodgy behaviour out there!
  14. Roberto Member

    Re: New Zealand Tax Exemption

    I have asked the Registrar of Incorporated Societies to investigate the status of the CoS with a view to terminating its status as a Incorporated Society. I have also asked the Inland Revenue Dept to investigate the financial statements of CoS with a view to revoking its tax-free status due to International funding. I also note in the NZ Herald this morning (29/11/08) a letter from a Henry Balfour in Nelson calling on IRD to revoke tax-free status. I'll let you know when I hear back from IRD and Reg of Inc.Soc.
  15. Roberto Member

    Re: New Zealand Tax Exemption

    Here's the reply from the Registrar of Societies (with contact details if you want to follow through)...I was targetting the funding from overseas, and payments back to USA...

    Dear ****, Thank you for your enquiry.

    Where a society receives funding from is not a matter for the Registrar to investigate. The registrar has the powers to only investigate breaches of the Incorporated Societies Act itself.

    I trust this answers your enquiry, please do not hesitate to contact us, should you have any further queries, on 0508 762 438.

    Regards

    Angelique Van der Zee| Lead Advisor| Ministry of Economic Development| Tollfree 0508 762 438| Fax +64 3 962 2700
    Voluntary Organisation Register

    The problem here is that the Incorporated Societies Act is very broadly drafted to allow just about anything that does not financially benefit an individual. CoS very neatly fits within the Act, especially given that it espouses a charitable purpose. It can run a business so long as that business funds the charitable purpose.
  16. AnonKiwi Member

    Re: New Zealand Tax Exemption

    Ack, we might be a bit stuck. But good work anyway mate!

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